Short-term, Airbnb-style rental may be popular, but the bushfires and the coronavirus pandemic exposed its vulnerability to lack of visitor demand.
Aside from the cancellations, you may have a tough time finding guests who are inclined to travel any time soon.
We understand how badly this can impact your revenue. We have Brisbane and Gold Coast AirBNB hosts come to us seeking advice and options on how to recover from left and right booking cancellations.
And while it’s difficult to resolve the current situation, you can minimise financial losses from future unpredictable situations by reconsidering rental arrangements for your investment property.
Instead of short-term rentals, which are more vulnerable to losses due to decline in tourism, why not offer long-term rental accommodation?
NOW IS THE PERFECT TIME FOR A TRANSITION
Although it has been well documented that short-term rentals can generate 30% more profit compared to long-term rentals, with the end of the coronavirus pandemic nowhere near in sight, it could be months before the tourism and travel industries in Australia can get back on their feet.
And stability is one of the main reasons why property investors are opting for long-term rental strategies.
Long-term leases with a set date ensure that rent and money is coming in at a steady rate and you don’t need to be concerned about off-seasons or pandemic that could make it difficult or nearly impossible to find new occupants, especially for an indefinite period.
LONG-TERM RENTAL REDUCES RISKS OF UNPREDICTABLE REVENUE LOSSES
With long-term accommodation, you can have more control of future situations that might affect your lodging business and revenue flow. Your profits will not be dependent on tourism and tourist activities, seasonal trends and unforeseeable events, such as sudden travel restrictions.
Discover what your home is worth in today's market
Prior to the coronavirus pandemic, Australia was faced with the bushfire incidents, which began a gradual decline in tourism and has affected the short-term rental industry.
Before these twin disasters occurred, our Airbnb properties were usually booked for months, with just a few cancellations throughout the year.
But with international travel bans, lockdowns in most cities and strict social distancing rules in place, not many people are booking travels and accommodation, or even making enquiries.
Understanding the implications and uncertainties of the situation, we have strongly advised clients and other short-term rental owners who are facing a possible loss of income for months and months to consider long-term tenancy arrangements.
LONG-TERM RESIDENTIAL TENANCY AND INCOME STABILITY
What is a long-term residential tenancy? Generally, this means that tenants sign an annual lease, but it could also be on a month-to-month basis.
There are a number of clear advantages to renting your property to tenants on a long-term basis.